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Leo XIII and Minimum Wage

Here’s an example of how to screw up an historical premise and a thesis about economic progress.

Stephen Mihm posits that the Black Death spawned minimum wage laws. Well, actually first Britain passed a maximum wage law after the Black Death, and some 250 years later got around to imposing an official minimum wage. Just possibly, 250 years of additional factors might be more responsible than the Black Death, but who knows, maybe British are just slow off the starting block?

He then goes on to credit Leo XIII with a major turning of support for minimum wage laws. He says

The first was the Vatican. In 1891, Pope Leo XIII offered a distinctly medieval take on the labor question. In his Rerum Novarum, the pontiff called for the passage of laws to remove “the causes which lead to conflicts between employers and [the] employed.” Foremost among those causes, he averred, was the insufficiency of wages. “To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven,” he declared.

But there was an easier way to solve the problem than involving the Almighty. Instead, the pope counseled the revival of the medieval living wage, arguing that the compensation of a wage earner should be sufficient “to support a frugal and well-behaved wage-earner.”

The encyclical resonated in nations that had high numbers of both Catholics and aggrieved workers. Among these was Australia, which along with New Zealand would become a cradle of the modern minimum wage movement.

Only, Leo didn’t say that, and the real content of the encyclical didn’t resonate in those nations.

45. Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however - such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. - in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection…

48. In the last place, employers and workmen may of themselves effect much, in the matter We are treating, by means of such associations and organizations as afford opportune aid to those who are in distress, and which draw the two classes more closely together. Among these may be enumerated societies for mutual help; various benevolent foundations established by private persons to provide for the workman, and for his widow or his orphans, in case of sudden calamity, in sickness, and in the event of death; and institutions for the welfare of boys and girls, young people, and those more advanced in years.

49. The most important of all are workingmen's unions, for these virtually include all the rest. History attests what excellent results were brought about by the artificers' guilds of olden times.

So the reality is that Leo explicitly rejected the “undue interference on the part of the State” and instead was promoting alternative mechanisms – namely guilds, unions and the like, with laws supporting the rightful place of such entities.

As usual Catholic social teaching strongly supports intermediary social bodies carrying much of the weight of social action, with the state mainly refereeing a fair playing field.

And as usual, liberals (including co-called Catholic ones) deliberately mis-interpret the official teaching to say whatever they want it to say and pretend that it’s “what the Church said.” Well, that’s just wrong.

Leo himself points out the fundamental mis-placement of a state-wide minimum wage:

the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. - in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely

It is impossible for the state, in setting a universal minimum wage, adequately to take note of the fact that (just for example) in one industry many or most of the workers are student-aged, unskilled, and dependent on parents, while in another industry most workers are independent adults. There is a fundamental irrationality for supposing that a state-wide minimum wage designed to be sufficient to support an independent adult with family should at the same time be the appropriate wage for dependent unskilled youths. And there is a fundamental irrationality to supposing that there CAN EVEN POSSIBLY be an actual minimum value of a person’s labor, so such a law flies in the face of economic reality. If an ordinary 18 year old’s typical unskilled labor is worth $8, what is a 14 year old’s typical labor worth? Or that of a mentally ill person who cannot pay attention to his task? Or, to put it the opposite way around, how many employers will hire a person to work at $8 per hour for activity that he only expects to return $4 per hour gross? None. By setting a minimum wage, you price lower-skilled workers out of the market, and lower-profit jobs as well. So instead of having such people industriously working for a portion of their keep (and relying on family or the community support for the rest) instead you have them not working for ANY of their keep, and relying on the community hand outs for the entirety of their support.

This is why real Catholic social teaching does not claim there is such a thing as a “living wage” that can be stated across the board applicable to all potential laborers. Generally, (but not universally) wages must support workers, but not all workers are capable of work that supports them entirely and so due wages are not universally life supporting. Catholic teaching does accept the generic notion of “just wages”, but insists that the concept must be applied in a context that recognizes both fair return for the employer and that the just wage cannot be determined apart from the worker’s capabilities, thus no single wage rate is the “just” rate in all cases. Leo XIII’s comment about wages to live on explicitly refers to support of a family, implicitly referring itself to the family man who supports a wife and children, and thus the comment cannot be understood to apply to all possible workers, and most definitely does not encompass a vision of the wife working full time for wages, nor children working while supported by family. And because Leo’s thesis was being mis-interpreted, Pope Pius XI made it more clear in Quadragessimo Anno :

66. The just amount of pay, however, must be calculated not on a single basis but on several, as Leo XIII already wisely declared in these words: "To establish a rule of pay in accord with justice, many factors must be taken into account."
67. By this statement he plainly condemned the shallowness of those who think that this most difficult matter is easily solved by the application of a single rule or measure - and one quite false.

Two of the downfalls of our current system are (a) that there are not nearly enough jobs wherein the job is designed to require most of the wealth-generating capacity of a family man and at the same time generates gross profit so that the laborer’s share of that is sufficient to support a family – while (b) the education system does not lend itself to producing workers ready, willing, and able to put forth the whole of their wealth-generating capacity intelligently and creatively for an employer in a human collaborative sense. One of the moral demands of an entrepreneur / manager is that he purposely craft his business around job-blocks wherein he gets the most wealth-generating work out of a man that is humanely suitable, (instead of wasting his employee’s talents and energy on make-work or less than entirely well-designed activity), so that the laborer’s contribution to new wealth in the overall result justifies paying him enough to support a family suitably. And overly intrusive social safety-nets can make this worse: employers who are just over the cusp of 30-hour work weeks for some employees will now reduce hours across the board to below 30 hours so that most workers do not require health insurance – thus forcing these workers to effectively get 2 part-time jobs (if they can find them) instead of one more encompassing job. This means that those who promote Obamacare and like legislation are, themselves, to blame for unjust wages, as Pope Pius XI said:

72. In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers. If, however, a business makes too little money, because of lack of energy or lack of initiative or because of indifference to technical and economic progress, that must not be regarded a just reason for reducing the compensation of the workers. But if the business in question is not making enough money to pay the workers an equitable wage because it is being crushed by unjust burdens or forced to sell its product at less than a just price, those who are thus the cause of the injury are guilty of grave wrong, for they deprive workers of their just wage and force them under the pinch of necessity to accept a wage less than fair.

Comments (15)

Quote:
So the reality is that Leo explicitly rejected the “undue interference on the part of the State” and instead was promoting alternative mechanisms – namely guilds, unions and the like, with laws supporting the rightful place of such entities.
end

One needs only to look at the date of the document and its historical context to understand the tide of progressivist and social-reformist thinking it was designed to counter.
The medieval guilds were far more powerful than labor unions ever dreamed of being. They controlled, directly, the quality of the product, the price paid for it, the circumstances of the workers and apprentices, their place in the community and even who they would marry, so it wasn't just about the wage they were paid.
The only ecclesiastical figure I know of connected to the public dialogue about the wage in the Progressivist era in the U.S. was Father John Ryan, who wrote about the "living wage" so many others advocated.
There's a lot of bruiting about the amount of the wage, but very little talk about the relative value of the wage. Only when the conversation shifts toward the actual value of what people are paid will the talk about the wage be meaningful.

(although I must say that the facts that the blurbs are by Weigel and Novak, and the dedication is to Fr. Neuhaus, give this trad-con a certain amount of trepidation. Perhaps this book should be taken with a dose of Fr. Barrera.)

Another irrationality is that minimum wage laws set at the federal level don't account for the serious differences in cost of living between different states. In most states, minimum wage isn't that bad. In some of the more expensive blue states, especially in the cities, it is well below the poverty line. This is much like the irrationality of the federal income tax which does not/cannot account for the fact that $100k in one jurisdiction may be markedly upper class while being middle class in another (and in some locales like San Francisco and NYC, $80k is considered an "acceptable" starting wage for a young white collar worker because the cost is so high).

Mike, that's true. It is also reflected in the fact that quite a number of states have set their own minimum wage above the federal one, some in the $8.00 range and I guess Washington up over $9.00. What strikes me as being somewhat ironic is that at least until the economic catastrophes of 2008 and after, there were in some places a de facto condition that virtually nobody paid even AT the federal minimum wage, because they couldn't hire at that low a rate.

So from my perspective, what a minimum wage law does is it is ineffective in some cases because it doesn't reflect the real demand for labor, and the labor market itself sets higher wages, and in other cases it has a real effect in forcing wages higher than the market would set it, and by definition in those latter types of cases the law causes some people to lose out on a job by simply pricing the job out of the market. And it is more or less impossible to not run into one of these extremes with the law: the only way it can be not immoral is by being not effective anyway.

The medieval guilds were far more powerful than labor unions ever dreamed of being. They controlled, directly, the quality of the product, the price paid for it, the circumstances of the workers and apprentices, their place in the community and even who they would marry, so it wasn't just about the wage they were paid.

eib, given that the medieval guilds had been dead and gone for some 200 to 400 years by the time Leo XIII was writing, and had never been significant in the New World, I kind of doubt that all of THOSE SPECIFIC facets of those old guilds were what Leo mainly had in mind in referring to them. Since the time of the medieval guilds, there have been other guilds and guild-like associations, and one suspects that most of Leo's comments were intended to refer generically to "collaborative voluntary bodies" of whatever sort. Indeed, the mandatory (and monopolistic) facets of the medieval guilds finds little of comfort in Rerum Novarum, given Leo's statement:

54. Associations of every kind, and especially those of working men, are now far more common than heretofore. As regards many of these there is no need at present to inquire whence they spring, what are their objects, or what the means they imply. Now, there is a good deal of evidence in favor of the opinion that many of these societies are in the hands of secret leaders, and are managed on principles ill - according with Christianity and the public well-being; and that they do their utmost to get within their grasp the whole field of labor, and force working men either to join them or to starve. Under these circumstances Christian working men must do one of two things: either join associations in which their religion will be exposed to peril, or form associations among themselves and unite their forces so as to shake off courageously the yoke of so unrighteous and intolerable an oppression. No one who does not wish to expose man's chief good to extreme risk will for a moment hesitate to say that the second alternative should by all means be adopted.

The only ecclesiastical figure I know of connected to the public dialogue about the wage in the Progressivist era in the U.S. was Father John Ryan, who wrote about the "living wage" so many others advocated.

While Fr. John Ryan may have been the most outspoken of Church men advocating progressivism, but he was by no means alone among them, since around 1919 he was selected to be the director of the Social Action Department, a part of the newly formed National Catholic War Council. Somebody must have approved of his programs to select him for the post.

Another problem with the minimum wage is that it props up the over-inflated self-esteem of a lot of workers. It's not uncommon for low-paid workers to act like they're not paid enough to care about the work they are doing. Not very common, but hardly rare. If such workers face the prospect of truly having the value of their labor (and attitudes) priced at below subsistence level pay I think it might help change their behavior for the better.

Define what "over-inflated" self-esteem is? And by the way, the non-prole thing to be is simply not care, treat them with a silent disdain, and leave them to their delusions instead of making dogwhistle references to hard work and conservative values. And more importantly, why should you care about how they feel about themselves if it doesn't affect you, especially to the point where you are advocating a mean-spirited, punitive policy that would intimidate them with the prospect of "facing the prospect of truly having the value of their labor (and attitudes) priced at below subsistence level"? The people whom you direct your anger at have no real power and are merely trying to get by in the world (and presumably do not live in opulence or extreme comfort); they hardly have an enviable position. And if you envy them, you are truly pathetic!

Actually, BR, the main thing you might have attacked Mike's comments for was this:

It's not uncommon for low-paid workers to act like they're not paid enough to care about the work they are doing.

But not because it's not true - it simply IS true. Mike even says that it's "not very common", so you can't claim he is saying it of most, nor that he is saying it is typical of these workers.

What's notable is that the comment is restricted to low-paid workers, whereas quite a few middle-paid and high-paid workers act the same way. Human nature doesn't changes when you change your wage category. I have seen people paid 4 times the minimum wage act the same way. And I have heard about VPs and CEOs act as if they deserve million dollar salary hikes and bonuses when they are barely worth their already high basic salaries.

especially to the point where you are advocating a mean-spirited, punitive policy that would intimidate them with the prospect of "facing the prospect of truly having the value of their labor (and attitudes) priced at below subsistence level"?

I reject that this was mean-spirited at all. Mike was merely suggesting that they be faced with the ACTUAL VALUE of their labor. It cannot be mean-spirited to say "I hope you get paid what you are really worth." And it most definitely isn't punitive. Mike isn't even suggesting that they STAY at below-subsistence level pay, only that they discover the real value of work so that they are motivated appropriately to put their energy into their work in such a way that they become worth more to an employer and thus get paid more.

why should you care about how they feel about themselves if it doesn't affect you

When someone who has no real skills to their name cannot get a basic food order right (by that, I don't mean one thing is off, but the majority of the whole order is simply wrong) it very much does affect me. I tend to let it go when it's a one time thing, but when I see a pattern it very much does lay waste to my sympathy.

Christians, Catholics in particular, tend to forget that for all of their churches' high-minded rhetoric about social justice, charity, etc. Paul said that anyone who won't work shall not eat. Doing work badly, especially so badly it would have been better to have not done it, kinda fits in that category.

There is indeed a difference between "common" and "not uncommon", but the latter does not mean "rare" and the latter seems to imply that the phenomenon that Mike refers to is prevalent enough to be regarded as significant by Mike. I was referring to Mike's attitude about the subset of those workers while not making any statements or reference to the frequency of those workers.

But the crux of my response concerns why Mike should be concerned by how an artificially high, non-market wage over-inflates the self-esteem of its beneficiaries, especially as you acknowledge Mike concerns were focused on "low-paid" workers who most certainly are not enjoying the fruits of political power and financial influence. Clearly, it is enough of a concern to him that he would comment on it and recommend a normative prescription that they should be paid according to their worth (as perceived by him or the market). He was not merely acknowledging the existence of an "interesting" labor market phenomenon, but he indicated that it clearly upset him as this particular instance of "is" violated his ideal of "ought" or whatever his subjective preferences are on how low-skilled workers should be compensated or what their attitudes/self-esteem "should" be. As for myself, I am detached enough to ignore it, largely because it does not make it choleric and there is not much I could do to affect it. In other words, while Mike's feelings and recommendations on this issue may have aroused certain emotions in me (as Tony has suggested), I found it somewhat interesting that Mike (or anyone else) would care so much about the attitudes and compensation of a subset of low-paid workers that it would evoke some sense of moral disgust.

Mike T may be affected _less_ because he does not (as far as I know) own a business with employees, but those who do have employees certainly _are_ affected by bad attitudes. And employers are not some alien race. We here in America, BR, tend to think of employers as our fellow citizens and to admire many of them as the people who make jobs possible for the rest of us! I especially admire small business entrepreneurs who run the gauntlet of regulations.

There is a local contractor who has done a lot of work for me, and I recently joined Angie's List for the express purpose of putting up a good review of his business. I found a dissatisfied customer reporting about a bad employee of this business who had allegedly "showed up at their house at night demanding money." Now, for all I know, that could be a lie posted by a competitor, but I found my own reaction interesting: My immediate thought was to think, "Poor Dan. Looks like he got a dud that time." In other words, I instantly felt sorry for the employer who, assuming the story to be true, accidentally hired a badly behaved worker and got stuck with the resultant mess.

So, yes, employee attitudes do affect real people. And all the more so, of course, if it is made difficult by this or that employment regulation for the employer to fire the employee with the bad attitude or the behavioral problem.

Sorry, I do not live in the US: I live in Cerulean City, Kanto currently working as a Gym Leader of a gym that completely subsidized by the quasi-socialist government (since a gym is considered a public good here and battling does not bring any revenue to fund the operations of the gym) and waiting for a few trainers to challenge me today.

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Still, I do not see what is wrong with their subjective feelings or if they have some detachment that they can do their job with some minimum of competence, as long as they are not endangering the physical well-being of another or being openly and unpleasantly defiant (I usually expect this behavior to be quite concealed). Most people who have an non-prestigious job often have some feelings of detachment so they would not let the negative aspects of their job be associated with their sense of personal identity.

Most people who have an non-prestigious job often have some feelings of detachment so they would not let the negative aspects of their job be associated with their sense of personal identity.

In other words, if you have what you think of as a dead-end job, you have every right to try to check out from reality and pretend that you have a right to something better.

See, that's just not the attitude I want to see when I am in a store getting my groceries checked out. Nor does the store owner. I want and expect to see the employees treat me like a person, and like their offering me their service is a personal interaction of human beings doing good for and by each other, a good will leading to a mutual exchange of good for the improvement of both.

Not too far from me is a fairly new larger grocery store (part of a chain, but family owned). This store's management specifically inculcates in the employees (all of them) a sense of can-do readiness to listen carefully to what the customer wants, and see if they can satisfy it within what the store has to offer - and say so when the store cannot accommodate that desire. The employees are expected to be cheerful, to engage the customer with the attitude that the store WANTS the customer's business and as a necessary concomitant attitude they WANT to do good by the customer. Not only does this store pay more to the employees than most of the local grocery stores, they also consistently rank in the top 100 of American businesses in terms of satisfied customers.

Every job that has economic value has worth to the human family (excepting jobs doing something inherently immoral, of course). Janitors are an essential part of large entities, and they provide benefits to the community. Each person in doing their work, no matter how lowly, should be happy to be of service to others and be willing and ready to offer that service so the people around them can be better off. When I was a janitor I did that. When I was a dishwasher I did that, and as a busboy and then waiter. Now that I have a "high-paid" job (relatively speaking, nothing like doctors and lawyers and CEOs) I still do that to every customer that crosses my desk or phone. Even though I work for an outfit that most people would not want to have to deal with on a regular basis, I regularly get customers saying "gee, I'm glad I talked to you about this". If an employee can't see how his work benefits the human family, maybe he should be elsewhere. If he can see it, then he should be of good cheer in doing it and attempt to do it competently.

Laborem Exercens:

It only means that the primary basis of tbe value of work is man himself, who is its subject. This leads immediately to a very important conclusion of an ethical nature: however true it may be that man is destined for work and called to it, in the first place work is "for man" and not man "for work"... Given this way of understanding things, and presupposing that different sorts of work that people do can have greater or lesser objective value, let us try nevertheless to show that each sort is judged above all by the measure of the dignity of the subject of work, that is to say the person, the individual who carries it out. On the other hand: independently of the work that every man does, and presupposing that this work constitutes a purpose-at times a very demanding one-of his activity, this purpose does not possess a definitive meaning in itself. In fact, in the final analysis it is always man who is the purpose of the work, whatever work it is that is done by man-even if the common scale of values rates it as the merest "service", as the most monotonous even the most alienating work....

And yet, in spite of all this toil-perhaps, in a sense, because of it-work is a good thing for man. Even though it bears the mark of a bonum arduum, in the terminology of Saint Thomas18, this does not take away the fact that, as such, it is a good thing for man. It is not only good in the sense that it is useful or something to enjoy; it is also good as being something worthy, that is to say, something that corresponds to man's dignity, that expresses this dignity and increases it. If one wishes to define more clearly the ethical meaning of work, it is this truth that one must particularly keep in mind. Work is a good thing for man-a good thing for his humanity-because through work man not only transforms nature, adapting it to his own needs, but he also achieves fulfilment as a human being and indeed, in a sense, becomes "more a human being".

Without this consideration it is impossible to understand the meaning of the virtue of industriousness, and more particularly it is impossible to understand why industriousness should be a virtue: for virtue, as a moral habit, is something whereby man becomes good as man

After I initially left a comment I appear to have clicked the -Notify me when new comments are added- checkbox and now whenever a comment is added I receive four
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Many thanks!

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